White House threatens veto on key spending bill

Jun. 28, 2012 - 04:16PM
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Among the issues raised by OMB over the spending bill: the Internal Revenue Service’s budget would be frozen, meaning the agency would get $945 million less than the White House requested for fiscal year 2013. (File photo)

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The White House on Thursday threatened a presidential veto of a House spending bill that contains no federal pay raise and would sharply cut spending at several agencies.

The Office of Management and Budget said senior administration advisers would recommend that President Obama veto HR 6020, the financial services and general government appropriations bill, if it were to be passed by Congress. OMB said in a statement that the bill’s spending cuts would degrade basic government services.

OMB also said the budget “fails the test of balance, fairness, and shared responsibility by giving millionaires and billionaires a tax cut and paying for it through deep cuts, including to discretionary programs.”

The spending bill calls for almost $21.2 billion in spending, which would be $376 million below fiscal 2012 levels and $2 billion below the White House’s request. When adjusted for inflation, the proposed 2013 bill would be virtually equal to 2008 funding levels.

It would freeze the IRS’ budget at the $11.8 billion it received in 2012 — about $945 million less than the White House requested in 2013. Rep. Norman Dicks, D-Wash., said that would force the IRS to cut jobs, especially in enforcement, and hurt the IRS’ ability to collect tax revenue the government is owed.

OMB singled out the IRS budget freeze as a particularly objectionable measure, and said it would “continue to erode IRS program performance, significantly reduce revenue, and impair taxpayers’ ability to access IRS services.”

OMB also objected to the bill’s proposed $649 million budget for the Executive Office of the President, which would be $23 million less than the administration requested. And OMB said the proposed $80 million budget proposed for OMB — a nearly $9 million cut from fiscal 2012 levels and $11 million less than requested — would force the agency to cut 90 employees, or 17 percent of its workforce.

And OMB objected to the lack of the president’s desired 0.5 percentage point pay raise in fiscal 2013, which would break the current two-year pay freeze. The financial services bill usually contains a pay raise, but this bill contains neither a pay raise nor a measure specifically freezing pay. Some Democratic lawmakers hope that Congress remains silent on federal pay, so Obama can set next year’s pay raise himself.